The principle of comity requires that intermediate appellate courts and trial judges in Australia should not depart from decisions of other intermediate appellate courts in respect of the interpretation of federal legislation or uniform national legislation, unless they are convinced that the earlier interpretation is plainly wrong.12 Whether or not comity requires that intermediate appellate courts follow seriously considered dicta, as opposed to the ratio decidendi, of other intermediate appellate courts, is not entirely clear.13 It is submitted that comity does not so require. The Victorian Court of Appeal’s observations constituted seriously considered dicta (expressed after hearing full argument), even though they were not required to decide any live issue before the Court. It is difficult (if not impossible) to characterise the observations as “plainly wrong”. Nevertheless, it is submitted that the comity principle is not engaged and the Full Court of the Federal Court is free to depart from the view of the majority of the Victorian Court of Appeal in Altain Khuder.
This is an important debate, which is not closed.
Since this article was first published, Beach J in Sino Dragon Trading Ltd v Noble Resources International Pte Ltd (No 2) [2016] FCA 1169 has lent his voice to the chorus that is opposed to the adoption of the Hong Kong default
Endnotes
[1] See, eg, A v R [2009] HKCFI 342. The Hong Kong Court of Appeal confirmed this approach in Gao Haiyan v Keeneye Holdings Ltd (No 2) [2012] HKCA 43, and also in Pacific China Holdings Ltd (in liq) v Grand Pacific Holdings Ltd [2012] HKCA 200. Recently, Hong Kong courts have applied the default indemnity costs rule to applications to stay court proceedings where a party unsuccessfully challenges the existence or validity of an arbitration agreement: Chimbusco International Petroleum (Singapore) Pte Ltd v Fully Best Trading Ltd [2016] 1 HKLRD 582 [2] [2011] VSC 12 [3] IMC Aviation Solutions Pty Ltd v Altain Khuder LLC [2011] VSCA 248 [4] At [335] per Hansen JA and Kyrou AJA (as he then was). Warren CJ observed (at [55]-[58]) that while it was unnecessary to express a view on whether the Hong Kong approach should be followed in Victoria, the fact that an award debtor had been unsuccessful in resisting enforcement of a foreign award did not in itself establish “special circumstances” justifying a costs order other than on the ordinary party-party basis. Rather, in her Honour’s view, costs should be assessed in the light of the particular facts of each case, bearing in mind the objects of the International Arbitration Act. The Hong Kong Court of Appeal in Pacific China Holdings was referred to the Victorian Court of Appeal decision in Altain Khuder. Notwithstanding, it adhered to the view that it should give effect to the practice of awarding indemnity costs in arbitration-related court proceedings against unsuccessful award debtors. [5] Ye v Zeng (No 5) [2016] FCA 850 [6] The PRC is a New York Convention (‘NYC’) country. [7] Ye v Zeng [2015] FCA 1192; Ye v Zeng (No 2) [2015] FCA 1243; Ye v Zeng (No 3) [2015] FCA 1279; Ye v Zeng (No 4) [2016] FCA 386 [8] At [74] [9] [2015] FCA 1046 [10] [2015] NSWSC 564 [11] At [38]